corn & soybean situation and outlook
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Department of Economics
Corn & SoybeanSituation and Outlook
AAEA & ACCI2009 Joint Annual Meeting
Milwaukee, WisconsinJuly 27, 2009
Chad HartAssistant Professor/Grain Markets Specialist
chart@iastate.edu515-294-9911
Department of Economics
U.S. Corn Supply and Use
Source: USDA
3.754.054.20($/bu.)Season-Average Price1,5501,7701,624(mil. bu.)Ending Stocks
12,52511,97012,737(mil. bu.)Total Use1,9501,8002,436(mil. bu.)Exports1,2751,2701,337(mil. bu.)Food, Seed, & Other4,1003,6503,026(mil. bu.)Ethanol5,2005,2505,938(mil. bu.)Feed & Residual
14,07513,74014,362(mil. bu.)Total Supply151520(mil. bu.)Imports
1,7701,6241,304(mil. bu.)Beg. Stocks12,29012,10113,038(mil. bu.)Production153.4153.9150.7(bu./acre)Yield87.086.093.5(mil. acres)Area Planted200920082007
Department of Economics
U.S. Soybean Supply and Use
Source: USDA
9.3010.0010.10($/bu.)Season-Average Price
1,6801,6551,803(mil. bu.)Crush17515491(mil. bu.)Seed & Residual
1,2751,2601,161(mil. bu.)Exports3,1303,0703,056(mil. bu.)Total Use
3,2612,9592,677(mil. bu.)Production110205574(mil. bu.)Beg. Stocks101510(mil. bu.)Imports
3,3803,1793,261(mil. bu.)Total Supply
250110205(mil. bu.)Ending Stocks
42.639.641.7(bu./acre)Yield77.575.764.7(mil. acres)Area Planted200920082007
Department of EconomicsSource: USDA, Weekly Weather and Crop Bulletin
Department of Economics
Hog Returns vs. Corn Prices
Sources: ISU Extension, Farrow-to-Finish;USDA-NASS
-50
-40
-30
-20
-10
0
10
20
30
Sep-06
Dec-06
Mar-07
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
$ pe
r hea
d
2
3
4
5
6
$ pe
r bus
hel
Department of Economics
0.80
0.85
0.90
0.95
1.00
1.05
1.10
Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09
Canada Mexico Brazil EU China South KoreaJapan Australia
Exchange Rates (Jan. 2009 = 1)
Source: USDA, ERS
Department of Economics
2009 Advance Export Sales
Source: USDA, FAS
0
50
100
150
200
250
300
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Milli
on b
ushe
ls
Corn Soybeans
Department of Economics
Crude Oil Futures Prices
Source: NYMEX
60
70
80
90
100
110
120
130
140
Aug.2008
Dec.2008
Dec.2009
Dec.2010
Dec.2011
Dec.2012
Dec.2013
Dec.2014
Dec.2015
Dec.2016
$ pe
r bar
rel
2008 2009
Department of Economics
Renewable Fuels Standard (RFS)
0
2
4
6
8
10
12
14
16
2009 2010 2011
Billio
n ga
llons
Additional Advanced Biofuels BiodieselCellulosic Biofuels Conventional Biofuels
CropYear
Billion Bushels
2008 3.572009 4.112010 4.43
Department of Economics
Outside Influences (Jan. 2007 = 1)
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
2.3
1/3/
2007
3/3/
2007
5/3/
2007
7/3/
2007
9/3/
2007
11/3
/200
7
1/3/
2008
3/3/
2008
5/3/
2008
7/3/
2008
9/3/
2008
11/3
/200
8
1/3/
2009
3/3/
2009
5/3/
2009
7/3/
2009
Corn Soybeans Ethanol Gasoline
Department of Economics
Outside Influences (Jan. 2009 = 1)
0.75
1.00
1.25
1.50
1.75
2.00
1/2/
2009
1/16
/200
9
1/30
/200
9
2/13
/200
9
2/27
/200
9
3/13
/200
9
3/27
/200
9
4/10
/200
9
4/24
/200
9
5/8/
2009
5/22
/200
9
6/5/
2009
6/19
/200
9
7/3/
2009
7/17
/200
9
Corn Soybeans Ethanol Gasoline
Department of Economics
1.5
2
2.5
3
3.5
0% 5% 10% 15% 20% 25% 30%
Price ($ per bushel)
Stocks‐to‐use ratio
Corn1990 - 2006
Department of Economics
2007/082008/092009/10 May
2009/10 June
2009/10 July
1.5
2
2.5
3
3.5
4
4.5
0% 5% 10% 15% 20% 25% 30%
Price ($ per bushel)
Stocks‐to‐use ratio
Corn
Department of Economics
Seasonal Pricing Patterns
0.94
0.96
0.98
1.00
1.02
1.04
1.06
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Corn SoySource: USDA, NASS,Monthly Price Data 1980-2008
Department of Economics
3.00
3.20
3.40
3.60
3.80
4.00
Aug
-09
Sep
-09
Oct
-09
Nov
-09
Dec
-09
Jan-
10
Feb-
10
Mar
-10
Apr-1
0
May
-10
Jun-
10
Jul-1
0
$ pe
r bus
hel
Corn Futures
Source: CBOT, 7/24/09
2009 Rev. Ins. Price $4.04
Department of Economics
8.80
9.20
9.60
10.00
10.40
Aug
-09
Sep
-09
Oct
-09
Nov
-09
Dec
-09
Jan-
10
Feb-
10
Mar
-10
Apr
-10
May
-10
Jun-
10
Jul-1
0
$ pe
r bus
hel
Soybean Futures
Source: CBOT, 7/24/09
2009 Rev. Ins. Price $8.80
Department of Economics
Thoughts for 2009 and BeyondGeneral economic conditions
Recession concerns still hold significant power in the marketsProjected economic recovery is a major key for crop prices for the
2009 crop year
Most important ag. statistics: Crop yield and acreage estimates
USDA is indicating 2009 season-average prices in the neighborhood of $3.75 for corn and $9.30 for soybeans (Update coming Aug. 12)
Current futures Friday: Corn $3.08, Soy $8.71
Department of Economics
Thank you for your time!
My web site:http://www.econ.iastate.edu/faculty/hart/
Iowa Farm Outlook:http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/
Ag Decision Maker:http://www.extension.iastate.edu/agdm/
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